LOM Bermuda Stock Exchange Sponsoring Services

The Bermuda Stock Exchange (BSX) offers companies the opportunity to list on a recognized international stock exchange in a cost effective manner and at an earlier stage than is currently possible in many any jurisdiction.  Global Custody & Clearing and its affiliate, LOM Corporate Finance provides companies and their management a comprehensive stock exchange sponsoring and listing services package. Contact LOM Corporate Finance to ascertain if a BSX listing is the right fit for your company.

Bermuda Stock Exchange

About

The Bermuda Stock Exchange (BSX) was established in 1971, primarily as a domestic capital market by a group of local businessmen. One of the founders of the BSX, Donald P. Lines, also served as Chairman of LOM Financial for over twenty years.  LOM Financial Limited owns over fifteen percent (15%) of the stock exchange and is a listing and trading member.

The BSX has grown with the Island’s international financial sector and is now the world’s largest offshore, fully electronic securities market offering a full range of listing and trading opportunities for international and domestic issuers of equity, debt, insurance securitization and derivative warrants.  The BSX has been the listing exchange of choice for some of the worlds largest companies from London to Hong Kong.

Furthermore, the BSX’s electronic trading, settlement and depository platform, licensed from NASDAQ OMX, is specifically designed to support the secondary market trading and settlement of sophisticated listed securities.  The platform, based on a central limit order book model, is fully automated and allows for the trading of both equity and fixed income securities.  As of March 2016, the market capitalisation of  the BSX’s listed issuers, not including Mutal Funds, was over US$ 289 Billion.

Reasons to list on the Bermuda Stock Exchange

  • Recognized by the UK Financial Services Authority (FSA), US Securities and Exchange Commission (SEC), London Stock Exchange (LSE),  World Federation of Exchanges and the International Organization of Securities Commissions (I.O.S.C.O.)
  • Increase market recognition and disseminate company information worldwide on Bloomberg
  • Lower listing costs and streamlined listing process
  • Expand market share
  • Diversify financing and shareholder base
  • Raise the capital to develop new products, expand production, increase sales and recruit personnel
  • Expand abroad
  • If investors are sophisticated, there is no minimum number of shareholders, no minimum market capitalization, and no profitability requirement

Ideal Candidates for Listing on the Bermuda Stock Exchange

  • Small to medium market capitalization companies
  • Growing companies that need to raise capital to expand
  • Companies looking for an alternative to AIM, NASDAQ, or LSE because they are smaller and costs are prohibitively high elsewhere

Time to List

  • A company can list in as little as 3 weeks once all documents are prepared and due diligence has been completed

General Requirements

  • Due diligence –  A company site visit may be required.
  • Production of a full prospectus or private placement offering document.  Typically prepared and reviewed by the company’s legal counsel.
  • Audited financials for the past 3 years. If the company is newly incorporated an exemption can be requested.
  • Listing Sponsor (LOM Corporate Finance)

Estimated Costs

  • Due Diligence Fee (a minimum of $5,000 in year 1 only)
  • LOM Listing Sponsorship Fee: ($20,000 year 1 and $5,000 year 2 and beyond)
  • BSX Listing Fees: $10,000 year 1 and $5,000 year 2 and beyond for companies under $10 million USD.
  • Actual costs will depend on a variety of factors including the type of listing required and actual hours worked

The fee charged by the Bermuda Stock Exchange is variable depending on market capitalisation. The first year, the issuer pays an Initial Fee and an Annual Fee. Thereafter, the issuer pays only the Annual Fee.  Total costs approximately $35,000 in year 1 and $10,000 each year thereafter for companies up to $10 million USD market capitalization (plus normal legal/audit fees)   Contact us to learn more

Bermuda Stock Exchange

Frequently asked Questions:

What types of BSX Listings does LOM offer to international companies?

  •  Secondary Listings – available for companies already listed and regulated on another recognised stock exchange.
  •  Mezzanine Market Listings – this is the usual listing sought by international companies that do not have a primary listing on another recognised stock exchange. The Mezzanine Market allows qualified companies to list on a recognised international exchange at a very early stage.
  • Collective Investment Vehicle Listings – available for various entities that engage in the investment of capital.

What are the costs to list on the BSX?

The BSX and LOM both charge initial fees and annual fees, which vary by the type of and size of the company.

  • For secondary listings, no additional service providers are required. For primary listings, the issuer will need an auditor of their choice and a Bermuda-based share registrar.
  • Primary listing fees are estimated after initial consultation.
  • Secondary listing fees for companies up to $1 billion in market cap are as follows:

o   BSX Fees: Initial – $5,500 (includes 1st year annual fee).

o   LOM Fees: Initial – $10,000 (includes 1st year annual fee).

What are the requirements for secondary listings on the BSX?

  • Latest annual report and audited financials.
  • Corporate resolutions authorizing the secondary listing.
  • Formal letter of application.
  • Listing and sponsorship fees.

How long does it take to list a company on the BSX?

  • Both primary and secondary listings can be completed in as little as 2 weeks once all due diligence is completed.

What will LOM do to ensure a reliable and efficent process?

LOM may visit the company onsite as part of due diligence process and meet with management in seeking the assurances we require as a BSX sponsor.   Collecting and assimilating the necessary information that the BSX requires.  This will involve correspondence with, but not limited to, the company, lawyers in various jurisdictions, accountancy professionals, and share transfer agents.  Preparing and filing the necessary documents with the BSX.  Meeting with the BSX and addressing follow-up questions.

Does LOM offer more than basic sponsoring services such as on-going filing and consulting functions?

  •  Yes, we can provide management consultancy services to the company and we can also prepare and submit the regular filings required by the BSX. Through our association with St. George’s Services Limited, LOM also can assist with company incorporation, preparation of financial statements, and corporate secretarial services.
  • At the listed company’s option and for a modest follow-on retainer, LOM is available to handle continuing compliance with the BSX and interface with the listed company’s directors, lawyers and accountants.
  • After market trading: LOM trades on most world-wide major exchanges and is a full trading member of the BSX.

Does ‘Restricted Marketing’ apply to the Mezzanine Market or for certain types of listings of Collective Investment Vehicles?

For primary listings, restricted marketing typically applies such that the subscriber must either: (i) contribute a minimum of US $100,000; OR (ii) otherwise meets the BSX definition of a suitable “Qualified Investor” (for further details see BSX Practice Note 1 but typically these are tests for net worth or annual income). This means that the Mezzanine Market and Qualified Investor Listings for Collective Investment Vehicles are not free trading in its strictest sense as both the seller and purchaser must demonstrate to the trading member that they fulfil BSX Qualified Investor requirements.

Can LOM assist in sourcing funds of Qualified Investors?

For compliance reasons, we typically do not assist in raising capital for companies which we Sponsor.

What are the common restrictions or qualifications for the new registrants?

Typically, requirements for a primary listing on the BSX are minimal compared to other exchanges. The BSX listing requirements concentrate on full disclosure. Provided the risks are known to investors that are either Qualified or are purchasing a minimum of $100,000, then it is usually possible to achieve a primary listing. For example, it’s possible to have only 1 investor and there is no minimum market capitalization requirement.

For secondary listings, the BSX relies mainly on filings already made for the primary exchange.

If I wish to explore the possibility of whether a BSX listing makes commercial sense for my company, what should I do?

For further details please contact Scott Lines at (441) 294-7027 (or E-mail: scott.lines@lom.com)

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Schedule of BSX Fees on Market Capitalization

Initial fee (all in US$)

Expected initial market value           Initial Listing Fee

$10,000,000                                                                5,000

50,000,000                                                                 10,000

100,000,000                                                               15,000

200,000,000                                                               25,000

500,000,000                                                               30,000

1,000,000,000                                                            35,000

+$1,000,000,000                                                        40,000

Annual fee (all in US$)

Market value of securities                  Annual Listing Fee

$10,000,000                                                                5,000

50,000,000                                                                 7,500

100,000,000                                                               12,500

200,000,000                                                               15,000

500,000,000                                                               17,500

1,000,000,000                                                            20,000

+$10,000,000,000                                                      25,000

All Fees may be subject to change with out notice.

Contact LOM to learn more